Monday, September 9, 2019
SoftBank urges WeWork to shelve IPO over valuation concerns: Report
ETtech Top 5: Paytm's burgeoning losses, Vikram lander 'tilted' & more
Paytm owner One97 in talks to pick up stake in Yes Bank
Alibaba-like MSME marketplace soon: Nitin Gadkari
India's linguistic diversity challenged Alexa to be better: Amazon exec
Paytm’s annual loss doubles to $549M
Running a payments business in India is not cheap. Just ask Paytm. One of India’s largest payment companies reported a net loss of Rs 3959 crore ($549 million) for the financial year that ended in March, up 165% over 1490 crore ($206 million) in the same period last year.
During the same period, the company’s revenue rose to Rs 3232 crore ($448 million), compared to Rs 3052 crore ($423 million) in the year before. The firm’s debt also surged to Rs 695 crore ($96 million), One97 Communications, the parent firm of Paytm, told investors in its annual report.
One97 Communications also runs an e-commerce business, which recently raised money from eBay, and Paytm Money, that runs mutual funds business. On a consolidated basis, the 9-year-old firm reported an annual loss of Rs 4217.20 crore ($584 million), up from Rs 1604.34 crore ($222 million) from the year before.
Indian news outlet BloombergQuint first reported (paywalled) the financial performance of Paytm.
The loss should worry Paytm, whose CEO Vijay Shekhar Sharma said in a conference last week that the firm would begin to work on going public in the next 22 to 24 months. The level of competition that Paytm faces today is only about to increase in the coming future, and unlike earlier, the Indian firm is not facing off financially weaker local rivals.
Paytm, which has raised over $2 billion to date from a range of investors including SoftBank, Alibaba, and Berkshire Hathaway, continues to be the largest mobile wallet app provider in India, but increasingly users are moving to government-backed UPI payments infrastructure. In UPI land, Paytm competes with Flipkart’s PhonePe and Google Pay, both of which are heavily-backed.
As of July, both PhonePe and Google Pay commanded a bigger market share across UPI apps than Paytm.
Also in UPI land, you don’t make money on each transaction. So lately, every payments firm in India, including Paytm, has expanded it offering to include financial services such as a credit card, or loan, or insurance.
In many ways, this has created a level playing field for payment firms that did not dominate the wallet business.
In a statement, Paytm said it has been investing $1 billion per year for the last two years to “expand payments ecosystem in our country.” The company plans to invest a further $3 billion in the next two years.
“We believe India is at the inflection point of digital payments and Paytm’s sole focus is towards solving the merchant payments and offering them financial services. We will invest Rs 20,000 crore ($2.7 billion) in the next two years towards achieving this,” a company spokesperson said.
The biggest challenge for Paytm and other UPI payment apps has yet to emerge. Before the end of this year, WhatsApp, which has over 400 million users in India, plans to offer UPI payment option to all its years in the coming month.
SoftBank mints QuintoAndar a new unicorn in Latin American real estate tech
QuintoAndar, the Brazilian real estate technology developer, has secured a massive $250 million Series D led by SoftBank, as the Japanese conglomerate continues to deploy its $5 billion commitment to the Latin American region.
QuintoAndar invented a marketplace that lets users search, book, rent and advertise rental properties in Brazil. The site manages listings and visits, transaction processing between tenants and landlords, and houses the digital contracts that bind these agreements together. QuintoAndar also developed a credit analysis system that negates the need for co-signers, deposits and rental insurance – barriers that have historically blocked deal flow in this industry.
Co-founder and CEO Gabriel Braga says QuintoAndar has now entered unicorn territory thanks to the SoftBank-led round. Dragoneer also participated, as well as return investors General Atlantic and Kaszek (which recently announced a fresh $600 million fund of its own).
QuintoAndar, which literally translates from Portuguese to English as “fifth floor,” is an example of a Brazilian startup solving Brazilian problems. Those seeking long-term rentals in big cities like São Paulo and Rio de Janeiro are throttled by bureaucratic policies that enforce expensive deposits, co-signer requirements and skyscraper-high insurance fees. On the supply side, amateur landlords are tunnel visioned on making money from transactions, creating a terrible customer service experience for tenants, along with wasted hours of apartment hunting. QuintoAndar is billing itself as a modernized fix that lets users search, book, rent and advertise rental properties in Brazil.
The startup, which has grown into a 1,000 person São Paulo-based operation has now amassed a total of $345 million to date, including a $64 million Series C led by General Atlantic that closed just nine months ago. Braga declined to confirm the exact valuation of QuintoAndar, but says that it has crossed the threshold of billion dollar status. The company was founded in 2013.
Why is this long term rentals startup accumulating so much capital? Brazilians are seeing home ownership as less of a long-term goal and are opting to rent, meaning more money in the bank and freedom to relocate. This, the founder believes, creates a big opportunity to make renting more efficient in a country where 62% of Brazilians are aged 29 or under, according to this review. Brazil’s population of 211,000,000 people has proven a hungry enough market for a startup like QuintoAndar to turn profitable, and to attract foreign investors like SoftBank. Co-founders André Penha and Braga were able to leverage these massive foreign investment checks to create a specific product to help generate liquidity for users in its home market.
Braga says the company doesn’t measure success by volume of users or its newly minted unicorn status, but by number of property visits carried out on QuintoAndar. The company is projecting over 2 million visits scheduled through its platform in 2019, and is seeing 4,500 contracts signed per month. The CEO attributes QuintoAndar’s popularity to its ease of use, and the fact that the renting service is generating liquidity for brokers and sellers in the Brazilian long term rentals market.
With the new funding, Braga intends to strengthen QuintoAndar’s userbase by acquiring new customers in more cities across Brazil. The company also intends to attract new talent and build out broker partnerships. In the long term, QuintoAndar envisions launching more financial products for its customers, and eventually using its suite of data to make recommendations for services like home renovations.
QuintoAndar now joins Nubank, Loggi, Gympass and Stone in the growing club of billion dollar Brazilian tech companies, but its founder is more interested in keeping the momentum going than celebrating entrance into the Latin American unicorn club. “I’m more focused on the long term mission that we have, and not overly excited about being a unicorn. Tomorrow’s another day, we have to keep working,” says Braga.
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Troubles keep mounting for the We Company as Softbank reportedly calls for shelving the IPO
The troubles for We Company and its main business WeWork are mounting as the Financial Times is reporting that the company’s main backer, Softbank, is pushing for the company to put its troubled public offering on hold.
Citing sources familiar with the company and its main investor, the Financial Times said that the cool reception We Company has received from public market investors.
The company needs to raise at least $3 billion in the public offering to trigger a $6 billion in debt financing from the very bankers architecting its IPO. If it fails to cross that $3 billion threshold and not have access to that debt, it would be a significant roadblock to the We Company’s global expansion plans. And those plans are vital to the company’s success, since it’s the growth story that the company is selling to public market investors.
Over the weekend, the Wall Street Journal reported that the company was thinking about reducing the amount it would seek in a public offering below the $20 billion figure that had been previously reported.
The We Company had last raised money at a valuation of over $47 billion and the constant reductions in the company’s value may create a self-fulfilling prophecy that pushes the share price down even further should the company go ahead with a public offering.
The company has even taken steps to roll back some of the more egregious financial arrangements that made investors look at the company askance. It added a woman to its board of directors after much public outcry over the board composition and unwound a nearly $6 million agreement the company had made with its chief executive Adam Neumann over the licensing rights to the brand “We”.
Still, Neumann’s control over the company and the mounting losses of the core business sub-leasing long term commercial rental space to short term tenants have made public investors balky on the We Company’s longterm prospects.
Profile of Dawn Ostroff, Spotify's chief content officer, as the company invests heavily in podcasts to gain an edge over rivals (Wendy Lee/Los Angeles Times)
Profile of Dawn Ostroff, Spotify's chief content officer, as the company invests heavily in podcasts to gain an edge over rivals — When Dawn Ostroff began working the graveyard shift at a Miami radio station, her parents assumed her career in radio would be short-lived.
Ahead of iOS 13, which will warn users of apps that collect location data in the background, Facebook publishes a blog post explaining how it uses location data (Kif Leswing/CNBC)
Ahead of iOS 13, which will warn users of apps that collect location data in the background, Facebook publishes a blog post explaining how it uses location data — KEY POINTS — Facebook has published an informational blog post about how its app collects and uses background location data from smartphones.
MeitY seeks UIDAI's opinion on linking social media accounts to Aadhaar
Isro yet to reestablish contact with the Vikram Lander three days later
Alibaba's DAMO Academy releases RynnBrain, an open-source foundation model to help robots perform real-world tasks like navigating rooms, trained on Qwen3-VL (Saritha Rai/Bloomberg)
Saritha Rai / Bloomberg : Alibaba's DAMO Academy releases RynnBrain, an open-source foundation model to help robots perform real-worl...
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Amrith Ramkumar / Wall Street Journal : An interview with White House OSTP Director Michael Kratsios, a Peter Thiel protégé confirmed by ...
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